Buyer beware: Brisbane’s most overvalued markets revealed
See the hotspots where buyers risk being trapped by plummeting property values, as rapid growth signals a looming market correction.
First-home buyers flocking to some of Brisbane’s most affordable suburbs risk being trapped by plummeting property values, with rapid growth in these areas sounding the alarm for a looming market correction.
Exclusive data has revealed the city’s top 20 property hotspots where buyers are most at risk of overpaying, including the entry-level markets of Woodridge, Crestmead, Gailes, Ipswich, Leichhardt, Deception Bay, and Inala.
Some popular inner-city suburbs may also be in line for price falls, such as Wilston, just north of the CBD, with a median house value of $1.8m.
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Inflated prices in these suburbs, which range in median from under $400,000 to just shy of $2m, indicate the market is at the peak of its cycle, new research by Suburb Data found.
Woodridge on Brisbane’s southern fringe ranked as most overvalued for both houses and units, priced at $605,572 and $384,341 respectively.
The suburb has been in high demand, attracting both owner-occupiers and investors drawn by strong rental yields, but a low market cycle timing score of 13 out of 100 suggests the recent price surge could be losing momentum, according to Suburb Data analyst Jeremy Sheppard.
Wilston was next most over-valued, while six of the top 20 suburbs were priced below $700,000 – the threshold for first-home buyer stamp duty exemption.
Robertson, known for its larger block sizes, was the richest market on the list, with a median house of $1.952m, followed by Wilston, then Shorncliffe ($1.58m), Gordon Park ($1.49m) and Cannon Hill ($1.43m).
Mr Sheppard said these areas had experienced extreme growth, pitting prices well above those in surrounding areas offering similar housing.
“No market can outperform forever,” Mr Sheppard said.
“It can reach a point where buyers aren’t prepared to pay the prices anymore because they have cheaper comparable options somewhere else.
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“When that happens, prices don’t just level out. Sometimes they can retract and then hit a new bottom for many years.
“Eventually they will become good value again, buyer demand will return and prices will start to grow once more, but it can take a long time until values return to that peak.”
Buyers’ agent Lloyd Edge said suburbs that gained sudden popularity were at risk of being overvalued as the “FOMO factor” — fear of missing out — pushed prices up.
“There are some pockets of Brisbane like this. No matter if the property is run down and in need of renovation, they will still sell for almost as much as a new house, because buyers just want to own a property in that area, regardless of the quality of the asset,” Mr Edge said.
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He noted a domino effect as prices rose: “Investors will start spruiking about capital gains to be made, and then a flood of investors enter the market”.
“When prices are inflated by investors, there’s no guarantee that owner-occupiers will want to buy there, which can make it difficult to sell when the market corrects itself.”
Ray White AKG Group CEO Avi Khan said Woodridge was one of the year’s top market performers – unit prices were up 40.5 per cent, according to PropTrack.
“The rapid price increases suggest Woodridge may be nearing a short-term peak, but long-term, continued population growth and investor demand could drive further appreciation.
Ongoing projects in Logan and SEQ’s expansion plans may also sustain demand,” Mr Khan said.
“Woodridge remains cheaper than Brisbane’s median house price, but the recent growth has made it less affordable than before.
“If price growth outpaces wage growth and rental yields, we may see a correction or a cooling period. But there is still significant demand from investors and population growth that may see this suburb continue to surge.”
Buyers were shifting to areas nearby, including Kingston, Slacks Creek and Logan Central, along with Marsden and Crestmead.
Mr Khan said Woodridge had benefitted from the upcycle, with improved crime rates on the back of community programs and local government investment enhancing safety and liveability.
Good transport links, including a train station, put the suburb within easy reach of both Brisbane and the Gold Coast.
McGrath agent Cayle Blaxland described Wilston as a tightly held suburb, popular for its village atmosphere, Queenslander homes, and easy access to the CBD.
“It’s a very small suburb, but many of the houses have an elevated aspect with city views, which has positioned Wilston as the leading star compared to Windsor or Grange, for example, which don’t typically offer as much elevation,” Mr Blaxland said.
House prices in Wilston were up 35 per cent rover the past year.
“If there’s any stagnation happening, it’s probably because of the emergence of sister suburbs like Windsor, Grange, Gordon Park, and Newmarket, which tend to be more affordable, while stock in Wilston has been very tightly held,” he said.
“Coming out of a very strong couple of years of COVID growth, people were happy to enjoy that ride and stay in the area for longer, and that’s where homeowners have capitalised.”
Mr Blaxland said the suburb attracted a high proportion of medical professionals and business owners.
Recent sales reflected strong demand, with an architectural home on Edmondstone St attracting huge interest. The property received three offers in two weeks and sold for close to $4m.
Properties on larger lots, such as 810 sqm renovators, were also sought after, with locals and developers alike competing for these parcels. These homes were fetching prices in the early $2 million range.
“A scarcity of stock and fewer sales might suggest the market has cooled a bit, but I’ve never been in a situation where a Wilston property hasn’t performed well, with plenty of inquiry and buyer interest,” Mr Blaxland said.
For buyers in an overvalued market, Mr Edge advised caution.
“If you’re investing, it’s crucial to understand the risk of paying too much and the long wait for returns,” he said.
“You may need to create your own value on the property through renovations or development to make returns.”
For homeowners, it could be a prime time to cash in, but Mr Edge warned of the challenge of repurchasing in the same area without overpaying.
“If you’re selling, you’ll hold the upper hand in negotiations while demand is high,” he said.
To avoid overpaying, Mr Edge advised a careful evaluation of comparable sales, focusing on recent transactions in the last few weeks.
“There’s no value in comparing to a property sold six months ago in a fast-moving market,” he said.
For those feeling too emotional, particularly during auctions, he suggested engaging a buyer’s agent to help maintain perspective and avoid paying more than a property is worth.
The research measured the ratio of demand to supply in every suburb, determined by online engagement on listings, how long it took homes to sell, auction clearance rates and listings volumes, among other factors.
BRISBANE MARKETS AT THEIR PEAK
1 WOODRIDGE Units
2 WILSTON Houses
3 VIRGINIA Houses
4 LEICHHARDT Houses
5 WOODRIDGE Houses
6 CHERMSIDE WEST Houses
7 MANSFIELD Houses
8 BIRKDALE Houses
9 SHORNCLIFFE Houses
10 CORINDA Houses
11 INALA Houses
12 ROBERTSON Houses
13 GAILES Houses
14 CRESTMEAD Houses
15 CANNON HILL Houses
16 IPSWICH Houses
17 GORDON PARK Houses
18 DECEPTION BAY Houses
19 BRIGHTON Houses
20 ARANA HILLS Houses
*source: Suburb Data
Originally published as Buyer beware: Brisbane’s most overvalued markets revealed
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